Essay Questions for Economics Assignment

Question 1: Managerial Theory and Profit Maximisation

Answer one of the following questions (1,500 words).

1. A fundamental criticism of the traditional theory of the firm is that the decision makers in a firm may not always aim to maximise profits in the first place. Use a managerial theory to explain the reasons why the decision makers may not aim to maximise profits.

2. The estimated four-supermarket concentration ratio in the UK was 71.1 per cent in January 2017. The Office of Fair Trading found the evidence showing that “supermarkets fixed dairy product prices the cartel used a so-called A-B-C information exchange, where supermarkets indirectly passed information.” Based on the information provided, (1) assess whether the UK grocery market is oligopolistic or monopolistic. (2) Explain the main reasons for supermarkets’ collusive behaviours.
 
3. The U.S. Federal Reserve reduced the U.S. interest rate to 0%-0.25%, down from about 1.75 percent. Explain the main domestic and external effects of the cut in interest rates on the U.S. economy.

4. With reference to the North Sea Oil Industry, discuss the concept of market failure and describe how positive and negative externalities can help our analysis of the government’s response to the climate change emergency and net zero carbon targets.

5. Evaluate whether the policy of asking students to take loans to pay for university tuition fees is supported by the Human Capital Theory. What would be the impact of levying tuition fees on university education in Scotland?

6. The proposed merger between Sainsbury's and Asda was blocked by the UK's competition watchdog. Critically evaluate why this decision was taken. Explain the mergers and acquisitions that have been successful.

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NOTE

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